Jan. 22 (Bloomberg) -- Timothy Geithner, President Barack Obama’s nominee for Treasury secretary, said that a “strong” dollar is in the U.S. interest.

“A strong dollar is in America’s national interest. Maintaining confidence in the long-term strength of the United States economy and the stability of the U.S. financial system is good for America as well as our trading and investing partners,” he said in written responses to questions from the Senate Finance Committee.

“As Secretary of Treasury, if confirmed, I will act to achieve those goals,” he said, according to the responses on the panel’s Web site.

Geithner did not use the phrase “strong dollar” in his confirmation hearing yesterday. Instead, he told the committee that confidence in the dollar is “critical” to the U.S. economy. He also said it’s important for America’s biggest trading partners to refrain from setting or manipulating their exchange rates.

U.S. manufacturers have urged the U.S. to push China to let its currency, the yuan, rise against the dollar. During Paulson’s tenure, the yuan rose steadily against the dollar before falling at the end of last year amid a weakening global economy.

Geithner also said the U.S. will press China for “currency realignment”, although officials are still considering “how and when” to raise the issue for best effect.

‘Manipulating’ the Yuan

“President Obama -- backed by the conclusions of a broad range of economists -- believes that China is manipulating its currency,” Geithner said. The president has pledged “to use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices,” he said.

Geithner said that in the near term, the U.S. and China need to pursue “coordinated stimulus” to strengthen demand in both countries. “Once demand is stabilized we need a constructive dialogue with China that focuses on helping China move towards growth that relies more on domestic consumption and less on exports,” he said.

“The immediate goal should be for us to convince China to adopt a more aggressive stimulus package as we do our part to try to pass a stimulus package here at home,” Geithner said.

Geithner did not take a position on whether to continue the Strategic Economic Dialogue meetings started by former Treasury Secretary Henry Paulson.

In the follow-up questions, the Senate asked whether soaring U.S. budget deficits will affect the dollar, given Congressional Budget Office estimates that the Treasury will need to sell $1.4 trillion in additional debt this year.

“In the short-term, deficits of these size are needed in order to prevent a much worse deterioration of our economy,” Geithner said. In the long run, however, the U.S. needs to “return to living within our means” in order to maintain long- term confidence in the U.S. economy and financial system.

To contact the reporter on this story: Rebecca Christie in Washington at Rchristie4@bloomberg.net;

Last Updated: January 22, 2009 10:06 EST